What is Six Sigma (6σ) ?
Six Sigma Concept :
Six Sigma (6σ) is a quality system based on measurements of how well an organisation meets customer requirement. It is a widely practiced leadership framework and management methodology that drives business improvement. Six Sigma can be defined as "a business process that allows organisation to drastically improve their bottom line by designing and monitoring everyday business activities in ways that minimize waste and resources while increasing customer satisfaction".
Although Six Sigma is a statistical technique, it was combined with a new methodology to control the processes at Motorola to result in dramatic improvements in the process.
Six Sigma is a process capability technique. The technical elaboration of Six Sigma can be achieved through the use of normal distribution and process capability indexes. Six Sigma was developed for solving the complexity of products and observing the failure of the products in order to achieve the predictive performances. Similar to Six Sigma methodology, in a process capability study, the number of standard deviations between the process mean and the nearest specification limits is given in sigma units. The sigma quality level of a process can be used to express its capability that means how well it performs with respect to the specification limits. By the way, in terminology of statistics, sigma represents the variation about the process mean.
The application of 6 Sigma methodology provides reduction in variance and augmentation in the process capability. A Six Sigma process can be interpreted in terms of process capability, which is associated with process variation. Process capability measures have been used to provide number of nonconforming product. At a six sigma capability level, a process will produce very few defects. This level is more commonly referred to as. six sigma capability.
Definitions of Six Sigma (6σ)
Six Sigma is defined by GE as "A vision of quality which equates with only 3.4 defects per million opportunities for each product or service transaction and strives for perfection.
According to Mr. Jack. Welch, "Six Sigma (6σ) is a disciplined Quality Improvement methodology that focuses on moving every process that touches. the customers - every product and service - towards near perfect quality". It is a measure of the company's quality"
Thus, is one sense, six sigma refers to a measure of process consistency and aims at achieving the same. The other meaning of six sigma is a methodology for improving processes. It is also a movement that has established process improvement at many leading organisations and trained thousands of employees for improvement of processes in their organisations. Six sigma is probably the most widely used methodology for improving process performance and is increasingly popular as a way of organizing an entire organisation to become more customer-focused and more quality-oriented.
Features of Six Sigma
The six most important characteristics of Six Sigma are :
1) Structured Approach :
It has a structured approach towards problem solving and the most commonly used version of this structured problem solving methodology is known as DMAIC (Define - Measure - Analyse - Improve - Control), an acronym for the phases of Six Sigma improvement. In this methodology, a team defines a problem and works to find a solution linked to its underlying causes, establishing practices to ensure that the solution is permanent.
2) Customer Focus :
It has a very strong customer focus and targets are set keeping in mind the requirements of the customers.
3) Facts and Data Driven :
The Six Sigma approach is absolutely facts and data driven and accurate data is always needed in a suitable and systematic format to arrive at the right decisions. Great importance is attached to the fact of making decisions on the basis of verifiable data rather than on assumptions and speculations.
4) Financially Driven :
The approach is also financially driven with the selection of projects being based solely on the concrete financial outcomes that they are expected to generate and there is emphasis on the achievement of specific and quantifiable targets.
5) Team Based :
Six Sigma is team based and the structured nature of this approach requires extreme discipline within the organisation which includes time management and pro-active leadership but the real challenge lies in the ability to plan and execute projects which deliver specified financial benefits.
6) Continuous Improvement :
Six Sigma is all about continuous improvement and like all previous quality improvement initiatives, its ultimate aim is to refine the processes within the organisation leading to the improvement of the quality of the produced output.
Process of Six Sigma
The Six Sigma Process of implementing in an organisation includes the following steps :
The primary aim is to identify, within each sub- process, the possibilities for defects of quality problems which can be arrived at through the use of different statistical tools, such as regression analysis, design of experiments and Chi-square testing. The quality problem which requires breakthrough solution has to be defined clearly in measurable terms. The problem selected should consider the requirements of the customer and should have relevance to the company's business. In other words, its solution should ensure great customer satisfaction as well as monetary gains/saving to the company. If the company has developed its business strategies, the problem should fall under any one of them. Defining a problem in manufacturing area is easier when compared to service areas.
2) Measuring :
The second most important step is the establishment of the metrics that will be improved using Six Sigma. It is also necessary to identify and rank the improvement opportunities. First the CTQ (Critical to Quality) characteristics of the process have to be identified in order to focus Six Sigma on areas that will have the greatest impact on customer satisfaction. For instance, design might turn out to contain the crucial CTQ in a manufacturing process while speed might be more relevant in the case of proceeding an order.
The output of the process, measured as multiples of its sigma under each CTQ (existing quality level), has to be recorded so that Defect per unit (DPU) is estimated in PPM. These will be used as the starting points for setting new targets, and proceeding with the subsequent steps.
3) Analyzing :
This is the stage at which new goals are set, and the route-maps created for closing the gap between current and target performance levels. It begins with bench marking key product performance against the best-in-class so that the sigma levels attained by comparable processes can be ascertained as the basis for new targets.
Then, a GAP analysis is conducted to identify the factors that distinguish best-in-class processes from those being analysed so that the areas of change can be identified. Statistical tools as well as conventional quality techniques like Brainstorming, Root-cause Analysis, Fishbone Diagram, Pareto analysis etc., may be used for carrying out the analysis.
4) Improving :
Once the project teams are satisfied with their data and determined that additional analysis will not add to their understanding of the problem, it's time to move on to solution development. Objective of this phase is :
- To confirm the key process variables.
- Quantify their effects on the CTQ (Critical to Quality).
- Identify the maximum acceptable ranges of the specifications; and then tackle the capability of the process.
- If the existing quality level is < 3σ, efforts must be directed to improve the processes so as to achieve at least 3σ.
- The transition from 3σ to 6σ is done on the 2 fronts enlarging the design-width to accommodate greater variability in the output and the second approach is to make improvements in the process itself so that the chances of defects are eliminated.
5) Establishing Control :
The final stage of Six Sigma implementation is to hold the gains that have been obtained from the improve stage. Unless there is a good control we are likely to go back to the original state. Hence, in this stage the new process-conditions are documented, and frozen into systems so that the gains are permanent. The process is assessed once more after the setting-in period in order to check whether the improvements are being sustained or not. If a quality programmes have to achieve meaningful results, the changes have to be put into a formal structure. Otherwise, workers may.go back to the earlier processes.
Benefits of Six Sigma
Six sigma allows organisation to become more competitive - regionally, nationally, or globally. The benefits of six sigma are as follows :
Design Better ProductsImprove QualityTop Down ApproachRapid and Almost Radical ImprovementsTransforms the Entire OrganisationProvides a Consistent MetricCustomer is Always in FocusContinuous Improvement Process
1) Design Better Products :
Six sigma can and does help many companies to design better products with less waste and at a lower cost.
2) Improve Quality :
Six sigma methodology at its best produces 'organisation-wide synergy, everyone pulling together to improve quality, cut costs and drive profitability.
3) Top Down Approach :
The top down approach of six sigma means that what is found to be good can be capitalized on and what is found to be bad can be removed quickly, because the very top tier of management are involved and expecting change, not running away from it.
4) Rapid and Almost Radical Improvements :
Several of the quality initiatives of the earlier days such as Quality Circles, Kaizen and Quality Function Deployment are very necessary for an organisation at all the times. However, by their very nature, these measures produce incremental improvements. In addition to these kinds of improvements, an organisation in today's fast changing business world needs improvements to be brought in very rapidly in order to match the pace of changing technologies and changing customer requirements. Six Sigma is such an instrument of change, which can bring about radical changes in the way an organisation functions.
5) Transforms the Entire Organisation :
When Six Sigma is implemented, the entire organisation in all its constituent parts is geared for absorbing rapid and radical changes. One cannot possibly bring in large changes in one part of the organisation, without adequate measures in the other parts. Six Sigma initiatives make the management to take a closer look at the various functions and departments and the inter-relationships between them. It boosts up the employee moral and helps in Team building. It also helps in developing leadership skills.
6) Provides a Consistent Metric :
By its very nature, Six Sigma provides measures and targets that are quantifiable. Specific defects deviations from the customer requirements - are identified and measured. Improvement performance is also measured. A consistently uniform measurability is one of its important distinguishing characteristics. Six Sigma uses 'customer requirements' as a yardstick.
7) Customer is Always in Focus :
The benefit of constant measurements is that the customer is always in focus with his/her requirements being the standard against which the measurements are done. Due to the presence Six Sigma, an organisation is always aware of the changes in the market. Helps. in improving customer relations and reduces customer complaints. It also improves customer loyalty.
8) Continuous Improvement Process :
Since six sigma is a measurement-based initiative, the organisation that implements this initiative would have to constantly keep itself appraised of the customer's requirements. In short, a Six Sigma initiative never stops. It is forever. It is true that Six Sigma signifies radical improvement. But, a radical improvement system does not have to negate continuous improvement.
Limitations of Six Sigma
Though six sigma is very effective method of quality control but it has several costs or limitations associated with it, which are as follows :
Six Sigma is 'Exacting' but not necessarily 'Exciting'Detraction from 'Creativity'Time frameTraining RequirementsCorporate FocusEmphasis on the Rigidity of the ProcessPersonnel ConsiderationsData ConsiderationsComplexity Considerations
1) Six Sigma is 'Exacting but not necessarily 'Exciting' :
For one, in this intensely competitive business world, quality -even Six Sigma or even literally zero defects quality - forms just the basic minimum. When a firm implements Six Sigma, it is only trying to reach the level of customer's expectations. This means, the firm is only trying to catch up with the competition. A customer is 'satisfied' after the Six Sigma efforts; but, she may not be delighted' or 'excited'. Six Sigma is good, but it does not 'surprise' the customer. While quality is about prevention of non-conformance, it is more so about delightfully surprising the customer. This is particularly true in today's business environment. However, Six Sigma does not address that delightful surprise part.
2) Detraction from 'Creativity' :
Because Six Sigma believes in metrics-and-measures that detect/account for the minutes one in a million error, it is feared that, it may get caught in its own numbers' trap. It is possible that such mathematical maze might bind up the creativity in organisation An organisation's preoccupation with the exacting Six Sigma might detract the organisation's attention from the vital activities of innovation which flourish, generally, in a loose unfettered organisational environment. There are organisations that innovate. There are organisations that do a perfect job as regards quality. Today's business environment calls for an organisation that is excellent in both these aspects. Though it seems like a tall order that is the need for a society that is ever evolving and is on a path to progress.
3) Training Requirements :
In traditional Six Sigma implementations, employees go through extensive training to become Six Sigma project leaders (Black Belts and Green Belts) and sponsors (Champions and Process Owners). For the black belt role in particular, training can take several weeks or more and occur over a period of months. This is not feasible in some environments.
4) Corporate Focus :
Although the principles underlying Six Sigma could certainly be made applicable to small business and organisations, it is primarily an option for larger corporate organisations. Overwhelmingly, the majority of training and information available is geared toward that sector. This makes it difficult for other groups to see any benefit in adopting the methodology.
5) Emphasis on the Rigidity of the Process :
Six Sigma gives emphasis on the rigidity of the process which basically contradicts the innovation and kills the creativity. The innovative approach implies deviations in production, the redundancy, the unusual solutions, insufficient study which are opposite to Six Sigma principles.
6) Personnel Considerations :
Six Sigma uses the analogy of martial arts to designate the level of training a person has with the system. One of the first levels of Six Sigma is "green belt” training and then "black belts" or "master black belts". These people heavily train on the tools used in Six Sigma, however, an organisation often only has a few people trained in the methodology. A disadvantage is that the manager or others involved in the day to day business do not understand the tools or perhaps some of the Six Sigma concepts. This can cause lack of buy-in from employees and make data gathering and process improvements difficult to implement. For example, if the manufacturing assembly line is making the 5,000 a day quota of products, the attitude can be that the process is not broken. So why fix it ?
7) Data Considerations :
In some situations, the core data necessary for Six Sigma to evaluate a process may not be available. For service organisations, determining data points to improve the process are not always clear-cut. For example, an insurance company that wants to improve the organisation may use Six Sigma. The company may have some data such as the previous number of customers and the current number of customers. However, the company may not have data on customer satisfaction or why the customer ended service. The company may not have enough information to know why it is losing customers. The Six Sigma process can begin gathering the data; however, it might not be fast enough to help a struggling company, especially if gathering the data has additional associated costs.
Lean Six Sigma
What is Lean Six Sigma ?
Lean Six Sigma is a methodology that maximizes shareholder value by achieving the fastest rate of improvement in customer satisfaction, cost, quality, process speed and invested capital. The fusion of Lean and Six Sigma is required because lean cannot bring a process under statistical control and six sigma alone cannot dramatically improve process speed or reduce invested capital.
The use of Lean Six Sigma has proved to be a powerful and effective way for providing sustained positive operational results in organisations worldwide. Lean Six Sigma is in fact a hybrid philosophy for continuously improving organisations.
Lean aims at eliminating waste by creating a culture of improvement where people learn powerful tools for solving problems and continuous improvement based on visual management and standardization that sustains enhancement. On the other hand, Six Sigma is a methodology that aims at reducing variations in production processes in order to improve quality and meet customers' expectations.
Lean, also known as the Toyota Production System, has enabled many organisations to reach unparalleled levels of excellence. According to Fortune Magazine, Toyota made 50% more cars in 2005 than it did in 2001. It earned $11.4 billion more than all the major manufacturers combined and out of the 10 highest quality rated cars that run in America, 7 were made by Toyota at a time when GM was deemed close to declaring bankruptcy and Ford was mired in financial problems and had to layoff 30,000 employees. These kinds of successful results have made Toyota Motor Company the most bench marked organisation in the world.
The primary premise for Lean focuses on the creation of value for the customers. The value creation that enhances the organisation's overall productivity is done by eliminating non-value added activities using specific sets of tools that optimise the utilization of the people and the processes. According to Jeffrey Liker, the leading Toyota Production System's expert in America, "Toyota Production System is a total system of people, processes, and tools that evolve and grow stronger over decades. It is not a toolkit or programme that you can implement' as you would a computer system. To really get anywhere close to the level of excellence of Toyota, senior leaders have to understand that Lean is a way of thinking".
The Lean thinking process, focuses on satisfying customers while improving productivity, reducing lead time, reducing manufacturing and product cost, increasing inventory floor space, reducing new product time to market, and improving the cost of quality.
This is done by implementing a strategy that constantly seeks a continuous improvement through the identification of the non-value added activities (Muda) and their elimination along with the reduction of the time it takes to perform the value-added tasks.
Defects within a production process are considered to be the results of deviations from the pre-defined targets. Six Sigma is a methodology that uses statistical and non-statistical tools to define the optimal quality target and the tolerance around the target for a production process. It also seeks to identify and remove the causes of defects and errors in production processes by reducing variations around the target and containing them within the tolerance. The Six Sigma approach to process improvements is project-driven; in other words, areas that show opportunities for improvements are identified and projects are selected to proceed with the necessary improvements.
The integration of Lean with Six Sigma came to be known as Lean Six Sigma Lean is used to reduce waste but it does not monitor production processes to determine if they are in control. It does not use statistical tools to measure the processes capabilities, i.e., their ability to generate reproducible products or services that meet or exceed customers' expectations. Because Six Sigma is project-driven, it is less flexible when it comes to addressing practical issues that occur daily and would not require even small projects to fix. Issues such as Total Preventive Management (TFM), changeover time, labour and equipment efficiency, inventory reduction, and overproduction are better addressed using Lean techniques. An integration of Lean and Six Sigma offers the possibility for reducing defects through a control of process variations and a reduction of waste using Lean techniques.